Research In Motion (NASDAQ: RIMM) is
a leading provider of wireless communications hardware, software and services. Company devices allow access to email, telephone, messaging, Internet and intranet-based applications. RIM products include the BlackBerry wireless platform and the RIM Wireless Handheld product line. The firm also provides software development tools and makes radio-based modems that other manufacturers incorporate into their portable devices. Competitors include Microsoft (NASDAQ: MSFT), Motorola (NYSE: MOT) and Nokia (NYSE: NOK).
The company surprised the Street earlier in the month, when it reported Q4 EPS of 72 cents and revenues of $1.88 billion. Analysts had been looking for 70 cents and $1.86 billion. Management also guided Q1 EPS to 82-86 cents (76 cent consensus) and Q1 revenues to $2.23-$2.30 billion ($2.02B consensus). In discussing the solid numbers, the firm noted that heightened retail activities helped drive exceptional subscriber growth during the quarter. Oppenheimer, Lehman Brothers and Caris subsequently reiterated "buy" recommendations on the stock and declared price targets in the $135-$150 range.
The news
kept RIMM shares cycling in a positive, seven-week trading channel. The price has just rebounded from the base of that channel, where an oversold MACD parameter suggested the potential for a rise back toward the top.
Altogether, brokers recommend the issue with nine "strong buys", eighteen "buys", five "holds" and one "sell". Analysts see a 33% growth rate, through the next year. The RIMM Sales Growth rate (102.36%), EPS Growth rate (118.95%), Operating Margin (28.81%), Net Profit Margin (21.53%), Return on Assets (30.09%), Return on Investment (39.33%) and Return on Equity (40.33%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 68% of the outstanding shares. The stock is one of those used to calculate the Nasdaq 100 Index and the AMEX Internet Index. Over the past 52 weeks, it has traded between $42.93 and $137.01. A stop-loss of $103.50 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
Closing Bell: Can't go up every day (BAC, HE, HPW, COMS, BRCD, WMT, AMD)
Wal-Mart grows profit and cash flow in Q3, but comps still ailing
Chasing Value: Ten stocks for 2010 -- Part 2
